Chambers believes the United States must lead the way out of the global economic slump, with small and medium businesses and select enterprise sectors spending first.

He also said Cisco will target six areas over the next several years. He hopes each can eventually add $1 billion of revenue into company coffers.

The San Jose, Calif., company will gain a foothold by in these areas through a combination of internal research and development and acquisitions, Chambers said.

Previous examples of the strategy include Cisco's $500 million purchase of Linksys, a maker of wireless networking gear for homes and small offices, as well as moves into optical and storage sectors.

Chambers declined to say what the new growth areas might be.

In addition to economic factors, Chambers addressed competition. When asked about Dell's recent push into the switch market, he said he was not surprised.

"We've always felt competition would come from below, both from Asian and internal U.S. (vendors)," Chambers said.

Cisco's overall approach (consulting, software, hardware), its use of industry standards and its reputation will help it prevail, Chambers said. Although, he allowed that if price becomes the driving factor it would help competitors.

That said, the company is not sitting pat on pricing, especially in markets its trying to push into. For example, the company gained storage customers last quarter by keeping prices low.

Chambers upbeat comments seem to be supported by an SG Cowen Computer User Survey released this morning. The firm surveyed 675 North American IT users and
concluded that a modest recovery in IT spending is coming, but the slope of the previous March 2003 survey is more modest.